Still No Debt Deal, Not Even Close

July 21, 2011

By ABCNEWS.COM

ABC News’ Mary Bruce (@marykbruce) reports:

Democratic officials familiar with the ongoing debt talks said tonight that they do not have a deal to reduce the deficit and they are not on the cusp of an agreement. President Obama continues to push for the biggest deal possible and believes there is still time to reach an agreement to raise the debt ceiling and reduce the deficit, but the difficulties remain the same.

According to officials, the president still hopes for a deal the includes deficit reduction, entitlement reforms and revenue increases. Any deal will have immediate cuts to discretionary spending, paired with a commitment to make entitlement cuts and enact tax reforms.

However, Democratic officials said that major disagreements persist over both entitlement and tax reforms, as well as how to enact mechanisms that ensure a deal is balanced. For instance, some of the big issues left to tackle include how much to raise additional revenue through tax code reform and how to make sure that Congress would enact entitlement cuts.

While both sides will have to compromise, this deal may cause more turmoil for Democrats who expressed outrage Thursday at the possibility that Obama would accept major spending cuts in exchange for tax code reforms down the road.